ECM Weekly (3 November 2018) - TFFIF, Innovent, Softbank, Zhaogang - Open the IPO Floodgate!

466 Views03 Nov 2018 13:40

Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.

It has been a fairly quiet week but with the market bouncing back from last week's low, we are getting more news flow on IPOs looking to launch their books soon and activity is starting to ramp up towards the end of the year.

Starting off in Hong Kong, Innovent Biologics Inc (1801 HK) has finally turned the lackluster IPO space around with a strong debut on the 1st of November, closing 18.5% above its IPO price. Prior to its debut, the institutional excluding cornerstone bookbuild was more than 10x oversubscribed and the IPO was priced at the top-end, suggesting positive sentiment going into the IPO. At current valuation, the upside is limited as it is trading around Ke Yan, CFA, FRM 's base case of US$2.5bn in his update note, Innovent Biologics (信达生物) Post IPO: Hit Our TP, What's Next?

Meanwhile, Thailand Future Fund (TFFIF TB) made a decent debut opening 3% above deal price and continued to trade marginally above its IPO price. There is nothing exciting about the debut since this is effectively a REIT. Furthermore, since the share has been mostly placed to local investors and not marketed for a quick profit but as an investment for a steady income stream, the share price will probably continue to hold up even though Sumeet Singh's view is that TFFIF should at least trade at a 200bps spread over government yield.

In Japan, Softbank Group (9984 JP)'s ambition for a US$90bn IPO for its telecom unit is dented after NTT Docomo Inc (9437 JP) succumbed to pressure to cut prices. The company guided that it will take about five years to recover above the profit level for the current fiscal year which led to KDDI Corp (9433 JP) and Docomo crashing 15 - 17% on the day of the announcement.

For upcoming IPOs, we are seeing a handful of IPOs that will launch soon in Hong Kong and we are already hearing preliminary valuations for them. Wanka Online (1669726D HK) is said to be valued up to U$1.6bn, Mobvista (MBV HK) up to US$3.3bn, Babytree Inc (BABYTRE HK) up to US$4.3bn, and Tongcheng-Elong Holdings Ltd (1629482D CH) up to US$6.8bn.

Sinochem Energy (1644249D HK) should also launch soon since it has passed the Hong Kong listing approval while Idreamsky Technology, which was previously delisted from the US, is seeking listing approval in Hong Kong too. Last, but not least, CNFinance Holdings Ltd (1640496D US), which already had some coverage on Smartkarma, is looking to raise only US$50m, much smaller than its initial guided valuation.

Accuracy Rate:

Our overall accuracy rate is 71.9% for IPOs and 64.1% for Placements

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • Liaoning Chengda Biotechnology (Hong Kong, ~US$500m)

Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.

Source: Aequitas Research, Smartkarma

News on Upcoming IPOs

Smartkarma Community's this week Analysis on Upcoming IPO

List of pre-IPO Coverage on Smartkarma

Hong Kong
Ant FinancialAnt Financial IPO Early Thought: Understand Fintech Empire, Growth & Risk Factors
Asia InfoAsiaInfo Tech (亚信科技) IPO: Cost Control Is the Key (Part 1)
BabyTreeBabytree Group Pre-IPO - Young Moms Need It but Almost All Seem to Have It, Might Be at Peak MAU
BabyTreeBabytree IPO Preview: In Desperate Need of Alibaba to Unleash Its Potential
BitmainBitmain IPO Preview: The Last Hurrah Before Reality Bites
BitmainBitmain IPO Preview (Part 2) - King of Cryptocurrency Mining Rigs but Its Moat Is Shrinking
BitmainBitmain: A Counter Thesis
BitmainBitmain (比特大陆) IPO: Running Out of Steam on Mining Rigs (Part 1)
BitmainBitmain (比特大陆) IPO: Value At Risk of Founder's Belief (Part 2)
Canaan Inc.Canaan Inc. IPO Preview (Part 1) - The Biggest Blockchain Related IPO Globally in 2018
Canaan Inc.Canaan Inc. IPO Preview (Part 2) - A Closer Look at ASIC Developments and Competition
Canaan Inc.Canaan Inc. IPO Preview (Part 3): Earnings Forecast & Valuation Analysis
Canaan Inc.Canaan (嘉楠耘智) IPO Quick Take: Beware that ASIC Is a Different Ball Game
CansinoCanSino Biologics (康希诺) IPO: Promising Pre-Clinical Results but Vaccine Scandal Weighs (Part 1)
CenmintangCenmintang IPO Preview: A Beverage and Snack Play Whose Growth Is Hard to Grasp
China FeiheChina Feihe IPO Preview: Goat Bless Infant Formula Milk?
Entertnmt PlusEntertainment Plus – 60% Market Share, Margin Not a Concern
Entertnmt PlusMaoyan IPO Preview: Running Out of Growth Drivers
Entertnmt PlusEntertainment Plus (猫眼娱乐) IPO: The Engineered Movie Ticketing Leader Running Out of Steam (Part 1)
Entertnmt PlusEntertainment Plus (猫眼娱乐) IPO: The Coming Regulatory Bang Isn't That Bad (Part 2)
Fosun TourismFosun Tourism IPO, Part 1: Back to the Beach With Club Med! | But Is This a 'China' Play?
Fosun Tourism

Fosun Tourism IPO Analysis: Quid Pro Quo for the Better of Fosun Group?

China KepeiChina Kepei Edu (科培教育) Pre-IPO Review - A Well Run Private Higher Education Company
MicuRxMicuRx Pharma (盟科医药) IPO: Betting on Single Drug in the Not so Attractive Antibiotic Segment
Sinochem EnergySinochem Energy (中化能源) IPO First Impression: Trophy Asset Mixed with Volatile Trading Business
STX STX IPO Preview– a One-Hit Wonder
STX STX Entertainment (胜图娱乐) IPO: Legendary Founder but Results Matter
Stealth BioStealth Biotherapeutics IPO: Cure the Symptoms but Not the Cause (Part 1)
TongchengTongcheng-ELong (同程艺龙) Pre-IPO Review - A Force to Be Reckoned With
TongchengTongcheng-Elong IPO Preview: When Unequals Try to Merge as Equals
Qilu ExpressQilu Expressway IPO Preview: Concentration Risk and Recent News May Mean Discount to Peers
WankaWanka Online Pre-IPO - Listing Too Early but It Needs the Cash
WankaWanka Online IPO Preview: Rapid but Unsustainable Growth
WeLabWeLab Pre-IPO - Stuck in a Regulatory Quagmire; Not the Right Time to List
YancoalYancoal Australia IPO: Just Turned Profitable But Is It Sustainable Against Industry Headwinds
South Korea
AsianaAsiana IDT IPO Preview (Part 1)
AsianaAsiana IDT IPO Preview (Part 2) - Valuation Analysis
DaeyuDaeyu Co. IPO Preview (Part 1)
EbangEbang IPO Preview (Part 1): Lower Sales but Higher Operating Profit Versus Canaan Inc.
FoodnamooFoodnamoo Inc IPO Preview (Part 1) - A Leader in Home Meal Replacement Products in Korea
KMH ShillaKMH Shilla Leisure IPO Preview (Part 1) - Highly Profitable Operator of Public Golf Courses in Korea
KMH ShillaKMH Shilla Leisure IPO Preview (Part 2) - Valuation Analysis

Livent IPO Preview (Part 1): A Profitable Company that Produces Lithium


Plakor IPO Preview (Part 1)


Robotis IPO Preview (Part 1) - An Innovative Provider of Robotic Solutions in Korea

VespaVespa Inc IPO Preview (Part 1)
T-RoboticsT-Robotics IPO Preview (Part 1) - Following the Explosive Demand of Robotis IPO?
ZinusZinus IPO Preview (Part 1) - An Amazing Comeback Story (#1 Mattress Brand on Amazon)
CMS InfoCMS Info Systems Pre-IPO Review - When a PE Sells to Another PE... Only One Gets the Timing Right
Crystal CropCrystal Crop Protection Pre-IPO - DRHP Raises More Questions than in Answers
Flemingo Flemingo Travel Retail Pre-IPO - Its a Different Business in Every Country
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review - Bigger, Better, Stronger but a Little Too Fast for Some
Mazagon DockMazagon Dock IPO Preview: A Monopoly Submarine Yard in India with Captive Navy Spending


Lodha Developers Pre-IPO - Second Time Lucky but Not Really that Much Affordable
LodhaLodha Developers IPO: Large Presence in Affordable Segment Saves Lodha the Blushes in a Sluggish Mkt
SoftbankSoftbank Telecom Pre-IPO Review - Vision Is Needed to Arrive at US$90bn Valuation
SoftbankSoftBank KK IPO Preview: Paying Dividends at a Full Price
The U.S.
CNFinanceCNFinance (泛华金融) IPO First Impression: Beware Rising Credit Risk and Slowing Loan Origination
CNFinanceCNFinance IPO Preview: A Renaissance that May Not Come
Tencent Music

Tencent Music IPO: A Deep-Dive on Why Tencent Music Is Profitable and Spotify Is Not

Tencent Music

Tencent Music (TME): Only 29% Spotify-Like, But the Other Business Produces Profits

Tencent Music

Tencent Music IPO: A Deep-Dive on Why Tencent Music Is Profitable and Spotify Is Not

Tencent Music

Tencent Music Entertainment Group - Much Ado Nah Music About Nothing!

Tencent Music

Tencent Music Entertainment Group: Part 2 -The Curious Case of Acquiring Ultimate Music Inc

Tencent MusicTencent Music Pre-IPO - This Is How We Do It - A Quick Look at How the Apps Work
Tencent MusicTencent Music Pre-IPO Review - The Final Countdown - Growth Doesn't Seem to Be Slowing Down
Tencent Music

Tencent Music Entertainment Group– Competitors Aplenty Imply No Differentiation Except Moniker

Tencent Music

Tencent Music:We Estimate Value at USD 3.77 Per Share; Lower Than Many Expect - $11.7 B for TME

Tencent MusicTencent Music Pre-IPO - Valuations Estimates - Leaving on a Jet Plane - $30bn Was Quite Stretched
Tencent MusicTencent Music Pre-IPO - Quick Peer Analysis - If I Was You, I’d Wanna Be Me Too - Bigger and Fast
Tencent MusicTencent Music Pre-IPO - Industry - Don't Cry - In 2010 a Little Red Dot Almost Overtook the Dragon
WeidaiWeidai IPO Preview: Robust Foundations in Turbulent Times
Latitude financialLatitude Financial Group Pre-IPO Review - Credit Prospectus Throw up Some Interesting Data Points
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